South Korea has officially cleared Binance to take a majority stake in GOPAX, concluding a two-year regulatory review that enables the global exchange to re-enter one of Asia’s most closely watched cryptocurrency markets.
The approval marks the closure of a key chapter in Binance’s regional comeback, which had been stalled since the company exited Korea in 2021 due to stricter real-name verification and anti-money laundering rules.
Regulators clear Binance to re-enter the Korean crypto market
Binance can now take over GOPAX and return to a market it had left in 2021 when new and tougher rules were introduced. GOPAX requested that regulators approve changes to its board and ownership structure in March 2023, which would have made Binance its main shareholder; however, the process was slow.
Korean regulators wanted to ensure that Binance could comply with all rules related to money laundering, user protection, and financial reporting, so they examined how the exchange operated in other countries.
Policymakers had doubts about the exchange’s ability to meet strict regulatory expectations in countries like South Korea due to its past legal troubles and the role of its founder, Changpeng Zhao.
Binance and Zhao faced major legal action in the United States, resulting in a $4.3 billion settlement with the U.S. Department of Justice, after being accused of facilitating money laundering and violating sanctions. However, the platform implemented significant changes in its operations, which convinced the Korean authorities that it had learned from its past and was ready to operate under local laws with greater transparency and care.
Senior analyst at Tiger Research, Ryan Yoon, said the two-year review showed just how carefully regulators had to be certain that Binance met what are known as “fitness and propriety” standards. He added that lawmakers now believe the exchange has fixed its earlier problems and can operate safely within Korean financial laws.
Binance faces slow growth in a market ruled by Upbit and Bithumb
Even with approval to acquire GOPAX, Binance still faces competition in a market already dominated by Upbit and Bithumb. These local exchanges have built deep relationships with users, banks, and regulators over several years, and Upbit controls nearly 72% of the entire market, while Bithumb holds around 24%.
Analysts say that most traders in Korea have grown accustomed to using local exchanges that are deeply integrated into the country’s real-name banking system, as users feel safe and familiar with them.
Ryan Yoon said that the lower transaction charges Binance provides to Korean users wouldn’t be enough to persuade many, as local traders value trust, safety, and stabilizing local connections over marginal fees.
The crypto exchange will also have to contend with Korea’s technical and regulatory limitations, particularly in relation to capital control laws and trade surveillance standards. Binance utilizes a global order-book system that connects liquidity across multiple regions.
However, local authorities require exchanges to keep domestic trading activities separate to prevent money laundering and capital outflows. In simple terms, the company will not be able to easily merge the trading system from GOPAX with its global platform.
GOPAX may need to operate in a more localized and contained manner, and Binance will be unable to bring some of its popular benefits to the market, such as fast order matching, deep liquidity, and cross-border trading access.
However, GOPAX can now access advanced technology, deeper liquidity pools, and the global expertise that comes from working with one of the world’s largest crypto platforms. Binance will assist the local exchange in enhancing its security systems and expanding its product range, while ensuring compliance with Korean laws.
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